Generated approximately $1 million in operating cash flow; year-end net cash position of $12.4 million.

Management Comments

Dov Sella, RADA's Chief Executive Officer commented, “2017 was by far the strongest year in over two decades. We more than doubled our revenues over last year and importantly, we returned the business to profitability. We also had a good year of cash generation and following an investment earlier in the year, our balance sheet is now strong with over $12 million in net cash and no financial liabilities, providing us with the capital to support continued growth over the coming years.”

“In the fourth quarter, we completed a major project of radar sales for counter-UAV systems, with very short-term delivery time for RADA’s highly strategic U.S. customer. This significantly boosted our revenues to record levels at over $9 million in the last quarter, up over 29% versus the prior quarter and more than double that of last year. We believe our success here will have strong potential to bring even more significant orders down the road, especially since the U.S. Army has recently stated that Short Range Air Defense and Active Protection Systems, have become a modernization priority.”

Concluded Mr. Sella, “In the near to mid-term, we are preparing to capitalize on the significant potential ahead of us, by opening a subsidiary in the United States, while investing further in our R&D capabilities. Looking to the coming first quarter of 2018, our ongoing business is strong and we expect to see revenues growth in the range of 30% over the first quarter of 2017.”

2017 Fourth Quarter Summary

Revenues totaled $9.1 million in the fourth quarter of 2017, an increase of 112% compared to revenues of $4.3 million in the fourth quarter of 2016.

Gross Profit totaled $2.2 million in the fourth quarter of 2017 (or 24% of revenues) compared to gross profit of $0.8 million in the fourth quarter of 2016 (or 19% of revenues). The gross margin in the fourth quarter of 2017 was impacted by the product mix and some other unique factors and is expected to return to the more typical 30%-32% range in the coming quarter.

Operating Income was $0.1 million in the fourth quarter of 2017 compared to an operating loss of $0.5 million in the fourth quarter of 2016.

Net income attributable to RADA’s shareholders in the fourth quarter of 2017, was $0.5 million, or $0.02 per share, compared to a net loss of $0.5 million, or loss of $0.03 per share, in the fourth quarter of 2016.

EBITDA was $0.5 million in the fourth quarter of 2017 compared to an EBITDA loss of $0.2 million in the fourth quarter of 2016.

Full Year 2017 Results Summary

Revenues totaled $26.2 million, an increase of 104% compared to revenues of $12.8 million in 2016.

Gross profit totaled $8.3 million (or 32% of revenues) compared to gross profit of $1.4 million (or 11% of revenues) in 2016.

Operating income totaled $2.0 million (or 7.6% of revenues) compared to operating loss of $3.4 million in 2016.

Net income attributable to RADA’s shareholders was $2.2 million, or $0.09 per share for the year ended December 31, 2017, compared to a net loss of $4.9 million, or loss of $0.35 per basic share, for the year ended December 31, 2016.

EBITDA totaled $3.5 million compared to an EBITDA loss of $2.6 million in 2016.

As of December 31, 2017, RADA had net cash and cash equivalents of $12.4 million, compared to $1.2 million as of year-end 2016. During the year, RADA had positive operating cash flow generation of approximately $1 million.

Investor Conference Call

The Company will host a conference call later today, starting at 10:00 am ET (5pm Israel time). Management will host the call and will be available to answer questions after presenting the results.

Dial in numbers are: US 1-888-407-2553; UK 0800-917-9141; Israel 03-918-0644 and International +972-3-918-0644.

For those unable to participate, the teleconference will be available for replay on RADA’s website at http://www.rada.com beginning 24 hours after the call.

About RADA Electronic Industries Ltd

RADA Electronic Industries Ltd. is an Israel-based defense electronics contractor. The Company specializes in the development, production, and sales of tactical land radar for force and border protection, inertial navigation systems for air and land applications and avionics systems and upgrades.

Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risk uncertainties and other factors include, but are not limited to, changes in general economic conditions, risks in product and technology developments, market acceptance of new products and continuing product demand, level of competition and other factors described in the Company's Annual Report on Form 20-F and other filings with the Securities and Exchange Commission.

Information with Regard to non-GAAP Financial Measures

The Company presents its financial statements in accordance with U.S. GAAP. RADA’s management uses supplemental non-GAAP financial measures internally to understand, manage and evaluate its business and make operating decisions. EBITDA is provided in this press release and the accompanying supplemental information because management believes this non-GAAP measure is useful for investors and financial institutions as it facilitates operating performance comparisons from period to period. As presented in this release, the term EBITDA consists of net profit (loss) according to U.S. GAAP, excluding net financing expenses, taxes, depreciation and amortization and ESOP expenses. EBITDA should not be considered in isolation or as a substitute for net profit (loss) or other statement of operations data prepared in accordance with GAAP as a measure of profitability. Reconciliation between the Company's results on a GAAP and non-GAAP basis is provided in the table below.

RECONCILIATION FROM GAAP TO NON-GAAP RESULTS

Year ended December 31,

Three months endedDecember 31,

2017

2016

2017

2016

Operating Income (loss)

1,983

(3,399

)

104

(541

)

Depreciation

638

554

184

149

Employees Option Compensation

559

111

168

70

Other non-cash amortization

325

172

84

149

EBITDA

3,505

(2,562

)

540

(173

)

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data

December 31,

2017

2016

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

12,417

$

1,205

Restricted deposits

322

317

Trade receivables (net of allowance for doubtful accounts of $14 at December 31, 2017 and 2016)

7,286

5,006

Costs and estimated earnings in excess of billings on uncompleted contracts

995

1,096

Other accounts receivable and prepaid expenses

330

349

Inventories, net

7,910

7,102

Current assets related to discontinued operations

2,468

2,254

Total current assets

31,728

17,329

LONG-TERM ASSETS:

Long-term receivables and other deposits

68

742

Property, plant and equipment, net

3,915

2,650

Long-term assets related to discontinued operations

319

266

Total assets

$

36,030

$

20,987

CONSOLIDATED BALANCE SHEETS

U.S. dollars in thousands, except share and per share data

December 31,

2017

2016

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Bank credit

$

-

$

575

Trade payables

2,904

2,557

Other accounts payable and accrued expenses

2,814

1,987

Advances from customers, net

41

839

Current liabilities related to discontinued operations

328

265

Total current liabilities

6,087

6,223

LONG-TERM LIABILITIES:

Convertible loan from shareholders, net

-

3,072

Accrued severance pay and other long term liability

758

663

Total long-term liabilities

758

3,735

EQUITY:

Share capital -

Ordinary shares of NIS 0.03 par value - Authorized: 37,500,000 shares at December 31, 2017 and at December 31, 2016; Issued and outstanding: 31,392,040 and 21,246,502 at December 31, 2017 and at December 31, 2016 respectively.

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